How to truly set yourself up for financial success
Blueberry Capital Management has great suggestions on how start young, be disciplined and guarantee long term success.
The younger you start the better you can reap the benefits of compounding and long-term market gains.
But investing can be confusing as there is a lot to learn. I have been investing for over two decades and that I believe we have a better way to invest that makes it easier and more efficient.
By the way, if you are in your 20s and want to learn how to invest your money, take a look at our previous article on how to invest in your 20s.
Now if you are interested in investing on your own here are some very important things to consider:
1. Determine what you should be saving/investing for
First, you should make sure that you have an emergency fund in place. This safety net should cover basic expenses for several months and prepare you for unforeseen expenses such as loss of income, or anything else that can put a roadblock in the middle of your financial plan.
Dave Ramsey, in his book The Total Money Makeover, outlines the importance of saving $1,000 to start your financial independence journey. You can consider that an emergency fund as well.
Second, look at investing toward retirement savings. Your employer likely offers a 401(k) plan, which is an important place to start—especially if your employer offers a match. Under current regulations you can invest a maximum of $17,500 in your 401(k) every year. With an IRA you can currently invest up to $5,500 a year. These allow you to invest retirement money in a tax-smart way.
Finally, invest toward other purposes. This may be a long-term or yet-to-be defined goal. Or it might be for near term goals, like purchasing a house in five years or an upcoming education expense.
2. Create an appropriate investment portfolio
Once you’ve determined your investment needs, create a portfolio that is suited to meet them. What does that mean? This is where it can get tricky—you will want to create a portfolio customized for each of your investment goals that has the optimal risk/return for your time horizon (by that I mean stock/bond % mix), be properly diversified, and low-cost (to deliver returns to you rather than to fund managers).
3. Manage the investment portfolio
After constructing a portfolio (or two) you should perform what we call “good housekeeping” for investments. After the initial purchasing of ETF/funds, you will have to perform regular rebalancing to maintain proper risk/return, adjust asset allocations over time, invest additional deposits and reinvest dividends. And while doing all of this, you should do so in a tax-efficient manner and minimize transaction costs.
You can try to do this all yourself if you have the financial expertise and time. There are a lot of different investment products out there and you’ll have to sort through them to see what’s right for you.
Or, there is an alternative— our very own asset growth and principal protection that can do all of the above. Blueberry Capital makes it ultra-simple to do sophisticated, low-cost investing (fees as low as 1%) with no account minimums or transaction costs.
If you are ready to set yourself up for financial success, get your mentality ready and get to work!
If you’re interested in increasing your net worth, take a look at our previous article called, “How to increase net worth through smart investing” here.
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